The average mortgage rate in the United States has dropped to its lowest point in over a year, signaling a shift in the housing market. As reported by Freddie Mac, the 30-year fixed-rate mortgage averaged 6.24% in November. This figure reflects a decrease of 2 basis points from October.
Current Mortgage Rates
In contrast, the 15-year fixed mortgage rate saw a slight increase. It rose by 3 basis points to reach 5.51%. Notably, both the 30-year and 15-year mortgage rates are lower than they were a year ago. The year-over-year decreases are as follows:
- 30-year fixed-rate mortgage: down 57 basis points
- 15-year fixed-rate mortgage: down 52 basis points
Impact on the Housing Market
Decreasing mortgage rates have started to influence homebuying activity. There has been a notable increase in mortgage applications, particularly in adjustable-rate mortgages and refinancing options. Additionally, existing home sales surged to an eight-month high in October.
However, it is important to note that due to a government shutdown, there was no data available for new home sales in October.
Market Indicators
The 10-year Treasury yield, a critical benchmark for long-term borrowing, averaged 4.09% in November. This represents a 3-basis point increase from the previous month. The current spread between the 30-year fixed mortgage rate and the 10-year Treasury stands at 215 basis points. This wide spread suggests ongoing market uncertainty, as a typical spread in a stable market would range between 150 to 180 basis points.
As mortgage rates continue to decline, it remains to be seen how they will further influence the housing market dynamics.
